Distribution Channel

Distribution channel plays an important part in the supply chain. Distribution channel, as defined by Coughlan et al. (2006), is a set of independent organizations involved in the process of making a product or service available for consumption. It serves as the connecting link between the producer and consumer by adding value to products or services (Kim and Frazier, 1996) and multiplies selling opportunities through network of intermediaries. These independent organizations are usually made of the manufacturers, intermediaries (wholesaler, retailer, specialized) and end users. They are seen as the key actors of a distribution channel (Coughlan et al., 2006) and are also known as the channel members. The subsequent paragraphs will address two real-time challenges that are faced by the channel members followed by discussions on how they can be eased or resolved.
Channels of distribution carry out a number of functions in order for the flow of goods from the producer to consumer to be possible. Some of these channel functions includes; * Physical distribution function – A function that increases the efficiency of the flow of goods along the chain by reducing the number of transactions needed for goods to flow, through breaking bulk and creating assortments. It also includes transportation and logistics infrastructure, with a focus on transporting and warehousing. * Facilitating function – A function that make the purchase process easier for customers and manufacturers. Intermediaries often provide customer services and repair and maintenance services. * Communication and transaction function – A function where they supply the sales force, advertising, contact, negotiation, and involve channel members as sources of important information. (Pearson Education, Inc. 2012)
From these functions, challenges of distribution channel can arise if it is not managed properly.
One of the many challenges of distribution channel that was identified from the research